EXHIBIT C
WARRANT
The security represented by this instrument was originally issued
on May 10, 2002 and has not been registered under the Securities
Act of 1933, as amended. The transfer of such security is subject
to the conditions specified in the Master Agreement dated as of May
9,2002 between the issuer (the "Company") and a certain investor.
The Company reserves the right to refuse the transfer of the
security represented by this instrument until such conditions have
been fulfilled with respect to the transfer. Upon written request,
a copy of such conditions will be furnished by the Company to the
holder hereof without charge.
STOCK PURCHASE WARRANT
Date of Issuance: May 10, 2002 Certificate No. W-1
FOR VALUE RECEIVED, Chaparral Resources, Inc., a Delaware corporation
(the "Company"), hereby grants to Central Asian Industrial Holdings N.V. and its
successors and assigns (the "Holder") the right to purchase from the Company
3,076,923 shares of Warrant Stock at a price per share of U.S. $1.30 (as
adjusted from time to time hereunder, the "Exercise Price"). The amount and kind
of securities purchasable hereunder and the purchase price for such securities
are subject to adjustment pursuant to the provisions contained in this Warrant.
This Warrant was issued pursuant to a Master Agreement dated as of May
10, 2002 (the "Master Agreement") between the Company and Central Asian
Industrial Holdings N.V. This Warrant is the "Warrant" referred to in the Master
Agreement. All provisions of the Master Agreement are hereby incorporated herein
in full by reference.
Certain capitalized terms used in this Warrant are defined in Section
5. Unless otherwise indicated herein, capitalized terms used in this Warrant
have the same meanings set forth in the Master Agreement.
This Warrant is subject to the following provisions:
Section 1. Exercise and Conversion of Warrant.
1.1 Exercise Period. The Holder may exercise the purchase rights
represented by this Warrant in accordance with Sections 1.2 and 1.3 at any time
and from time to time after the Date of Issuance to and including the fifth
anniversary of the Date of Issuance (the "Exercise Period"). The Company will
give the Holder written notice of the expiration of the Exercise Period at least
30 days but not more than 90 days prior to the expiration of the Exercise
Period.
1.2 Exercise of Warrant.
(a) The Holder may exercise the purchase rights represented by
this Warrant in whole or in part (but not as to any fractional shares
of Warrant Stock) pursuant to this Section 1.2.
(b) This Warrant will be deemed to have been exercised when
the Company has received all of the following items (the "Exercise
Time"):
(i) a completed Exercise Notice in substantially the
form attached as Exhibit I (an "Exercise Notice") executed by
the Person exercising all or part of the purchase rights
represented by this Warrant (the "Purchaser");
(ii) this Warrant;
(iii) if this Warrant is not registered in the name
of the Purchaser, an Assignment in substantially the form
attached as Exhibit II evidencing the assignment of this
Warrant to the Purchaser, in which case the Holder will have
complied with the provisions set forth in Section 7; and
(iv) either (A) a check payable to the Company in an
amount equal to the product of the Exercise Price multiplied
by the number of shares of Warrant Stock being purchased upon
such exercise (the "Aggregate Exercise Price") or (B) the
surrender to the Company of securities (including debt
securities) of the Company having a Market Price equal to the
Aggregate Exercise Price.
1.3 Conversion of Warrant.
(a) In lieu of exercising this Warrant pursuant to Section
1.2, the Holder may convert the purchase rights represented by this
Warrant in whole or in part (but not as to any fractional shares of
Warrant Stock) pursuant to this Section 1.3 into a number of shares of
Warrant Stock equal to:
N - [ [ N x EP ] ]
--------------
MP
Where:
N = the number of shares set forth in the Conversion
Notice (as defined below) delivered by the Purchaser.
EP = the Exercise Price determined as of the close of
business on the business day immediately preceding the
Conversion Time (as defined below).
MP = the Market Price of a share of Warrant Stock
determined as of the close of business on the business day
immediately preceding the Conversion Time.
(b) This Warrant will be deemed to have been converted when
the Company has received all of the following items (the "Conversion
Time"):
(i) a completed Conversion Notice in substantially
the form attached as Exhibit III (a "Conversion Notice")
executed by the Purchaser;
(ii) this Warrant;
(iii) if this Warrant is not registered in the name
of the Purchaser, an Assignment in substantially the form
attached as Exhibit II evidencing the assignment of this
Warrant to the Purchaser, in which case the Holder will have
complied with the provisions set forth in Section 7.
1.4 Exercise and Conversion Procedures.
(a) Certificates for shares of Warrant Stock purchased upon
the exercise or conversion of this Warrant will be delivered by the
Company to the Purchaser within five business days after the date of
the Exercise Time or Conversion Time, as applicable. Unless this
Warrant has expired or all of the purchase rights represented hereby
have been exercised or converted, the Company will prepare a new
Warrant, substantially identical hereto, representing the rights
formerly represented by this Warrant which have not expired or been
exercised or converted, and will, within such five-day period, deliver
such new Warrant to the Person designated for delivery in the Exercise
Notice or Conversion Notice, as applicable.
(b) The Warrant Stock issuable upon the exercise or conversion
of this Warrant will be deemed to have been issued to the Purchaser,
and the Purchaser will be deemed for all purposes to have become the
record holder of such Warrant Stock, at the Exercise Time or Conversion
Time, as applicable.
(c) The issuance of certificates for shares of Warrant Stock
upon the exercise or conversion of this Warrant will be made without
charge to the Holder or the Purchaser for any issuance tax in respect
thereof or other cost incurred by the Company in connection with such
exercise or conversion and the related issuance of shares of Warrant
Stock. Each share of Warrant Stock issuable upon the exercise or
conversion of this Warrant will, when issued in accordance with this
Warrant, be fully paid and nonassessable and free from all liens and
charges with respect to the issuance thereof.
(d) The Company will not close its books against the transfer
of this Warrant or of any share of Warrant Stock issued or issuable
upon the exercise or conversion of this Warrant in any manner which
interferes with the timely exercise or conversion of this Warrant. The
Company will from time to time take all such action as may be necessary
to assure that the par value per share of the unissued Warrant Stock
acquirable upon the exercise or conversion of this Warrant is at all
times equal to or less than the Exercise Price then in effect.
(e) The Company will assist and cooperate with the Holder or
Purchaser with respect to any governmental filings or governmental
approvals required to be made or obtained prior to or in connection
with any exercise or conversion of this Warrant (including making any
filings and obtaining any approvals required to be made or obtained by
the Company).
(f) Notwithstanding any other provision hereof, if an exercise
or conversion of any portion of this Warrant is to be made in
connection with a public offering, the exercise or conversion may, at
the election of the Purchaser, be conditioned upon the consummation of
the public offering in which case such exercise or conversion will not
be deemed to be effective until the consummation of the public
offering.
(g) The Company will at all times reserve and keep available
out of its authorized but unissued shares of Warrant Stock, solely for
the purpose of issuance upon the exercise or conversion of this
Warrant, such number of shares of Warrant Stock issuable upon the
exercise or conversion of this Warrant in full. The Company will take
all such actions as may be necessary to assure that all such shares of
Warrant Stock may be so issued without violation of any applicable law
or governmental regulation or any requirements of any domestic
securities exchange or automated inter-dealer quotation system upon
which shares of Warrant Stock may be listed (except for official notice
of issuance, which will be immediately delivered by the Company upon
each such issuance).
1.5 Fractional Shares. If a fractional share of Warrant Stock would,
but for the provisions of Sections 1.2 and 1.3, be issuable upon the exercise or
conversion of this Warrant, the Company will, within five business days after
the date of the Exercise Time or Conversion Time, as applicable, deliver to the
Purchaser a check payable to the Purchaser in lieu of such fractional share in
an amount equal to the difference between the Market Price of such fractional
share as of the Exercise Time or Conversion Time, as applicable, and the
Exercise Price of such fractional share.
Section 2. Adjustment of Exercise Price and Number of Shares. In order
to prevent dilution of the rights granted under this Warrant, the Exercise Price
and the number of shares of Warrant Stock obtainable upon the exercise or
conversion of this Warrant will be subject to adjustment from time to time as
provided in this Section 2.
2.1 Adjustment of Exercise Price and Number of Shares upon Issuance of
Common Stock. If and whenever on or after the Date of Issuance of this Warrant
the Company issues or sells, or in accordance with Section 2.2 is deemed to have
issued or sold, any shares of Common Stock for a consideration per share less
than U.S. $1.30 (as such amount is proportionately adjusted for stock splits,
stock dividends, reverse stock splits, recapitalizations and similar
transactions affecting the Common Stock after the Date of Issuance, the "Base
Price"), except with respect to any acquisition by way of issuance of Common
Stock or any issuance of Common Stock to Persons related to the Company, then
immediately upon such issuance or sale the Exercise Price will be reduced to the
Exercise Price determined by multiplying the Exercise Price in effect
immediately prior to such issuance or sale by a fraction, the numerator of which
will be the sum of (a) the number of shares of Common Stock Deemed Outstanding
immediately prior to such issuance or sale multiplied by the Base Price, plus
(b) the consideration, if any, received by the Company upon such issuance or
sale, and the denominator of which will be the product derived by multiplying
the Base Price times the number of shares of Common Stock Deemed Outstanding
immediately after such issuance or sale. Upon each such adjustment of the
Exercise Price hereunder, the number of shares of Warrant Stock acquirable upon
the exercise or conversion of this Warrant will be adjusted to the number of
shares determined by multiplying the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Warrant Stock acquirable upon the
exercise or conversion of this Warrant immediately prior to such adjustment and
dividing the product thereof by the Exercise Price resulting from such
adjustment.
2.2 Effect on Exercise Price of Certain Events. For purposes of
determining the adjusted Exercise Price under Section 2.1, the following will be
applicable:
(a) Issuance of Rights or Options. If the Company in any
manner grants any rights or options to subscribe for or to purchase
Common Stock or any stock or other securities convertible into or
exchangeable for Common Stock (such rights or options being herein
called "Options" and such convertible or exchangeable stock or
securities being herein called "Convertible Securities") and the price
per share for which Common Stock is issuable upon the exercise of such
Options or upon conversion or exchange of such Convertible Securities
is less than the Base Price determined as of immediately prior to the
time of the granting of such Options, then the total maximum number of
shares of Common Stock issuable upon the exercise of such Options or
upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options will
be deemed to be outstanding and to have been issued and sold by the
Company for such price per share. For purposes of this Section, the
"price per share for which Common Stock is issuable upon exercise of
such Options or upon conversion or exchange of such Convertible
Securities" is determined by
dividing (i) the total amount, if any, received or receivable by the
Company as consideration for the granting of such Options, plus the
minimum aggregate amount of additional consideration payable to the
Company upon the exercise of all such options, plus in the case of such
Options which relate to Convertible Securities, the minimum aggregate
amount of additional consideration, if any, payable to the Company upon
the issuance or sale of such Convertible Securities and the conversion
or exchange thereof, by (ii) the total maximum number of shares of
Common Stock issuable upon exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable upon
the exercise of such Options. No adjustment of the Exercise Price will
be made upon the actual issuance of such Common Stock or of such
Convertible Securities upon the exercise of such Options or upon the
actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities.
(b) Issuance of Convertible Securities. If the Company in any
manner issues or sells any Convertible Securities and the price per
share for which Common Stock is issuable upon such conversion or
exchange is less than the Base Price determined as of immediately prior
to the time of such issuance or sale, then the maximum number of shares
of Common Stock issuable upon conversion or exchange of such
Convertible Securities will be deemed to be outstanding and to have
been issued and sold by the Company for such price per share. For the
purposes of this Section, the "price per share for which Common Stock
is issuable upon such conversion or exchange" is determined by dividing
(i) the total amount received or receivable by the Company as
consideration for the issuance or sale of such Convertible Securities,
plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the conversion or exchange thereof, (ii)
the total maximum number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities. No
adjustment of the Exercise Price will be made upon the actual issuance
of such Common Stock upon conversion or exchange of such Convertible
Securities, and if any such issuance or sale of such Convertible
Securities is made upon exercise of any Options for which adjustments
of the Exercise Price has been or are to be made pursuant to other
provisions of this Section 2.2, no further adjustment of the Exercise
Price will be made by reason of such issuance or sale.
(c) Change in Option Price or Conversion Rate. If the purchase
price provided for in any Options, the additional consideration, if
any, payable upon the issuance, conversion or exchange of any
Convertible Securities, or the rate at which any Convertible Securities
are convertible into or exchangeable for Common Stock change at any
time, the Exercise Price in effect at the time of such change will be
readjusted to the Exercise Price which would have been in effect at
such time had such Options or Convertible Securities still outstanding
provided for such changed purchase price, additional consideration or
changed conversion rate, as the case may be, at the time initially
granted, issued or sold and the number of shares of Warrant Stock will
be correspondingly readjusted; provided that if such adjustment would
result in an increase of the Exercise Price then in effect, such
adjustment will not be effective until 30 days after written notice
thereof has been given by the Company to the Holder.
(d) Treatment of Expired Options and Unexercised Convertible
Securities. Upon the expiration of any Option or the termination of any
right to convert or exchange any Convertible Securities without the
exercise of such Option or right, the Exercise Price then in effect and
the number of shares of Warrant Stock acquirable hereunder will be
adjusted to the Exercise Price and the number of shares which would
have been in effect at the time of such expiration or termination had
such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been issued;
provided that if such expiration or termination would result in an
increase in the Exercise Price then in effect, such increase will not
be effective until 30 days after written notice thereof has been given
by the Company to the Holder.
(e) Calculation of Consideration Received. If any Common
Stock, Options or Convertible Securities are issued or sold or deemed
to have been issued or sold for cash, the consideration received
therefor will be deemed to be the net amount received by the Company
therefor. In case any Common Stock, Options or Convertible Securities
are issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Company will be the
fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration
received by the Company will be the Market Price thereof as of the date
of receipt. In case any Common Stock, Options or Convertible Securities
are issued to the owners of the non-surviving entity in connection with
any merger in which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity as
is attributable to such Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration
other than cash or securities will be determined jointly by the Company
and the Holder. If such parties are unable to reach agreement within a
reasonable period of time, such fair value will be determined by an
appraiser jointly selected by the Company and the Holder. The
determination of such appraiser will be final and binding on the
Company and the Holder, and the fees and expenses of such appraiser
will be paid by the Company.
(f) Integrated Transactions. In case any Option is issued in
connection with the issuance or sale of other securities of the
Company, together comprising one integrated transaction in which no
specific consideration is allocated to such Options by the parties
thereto, the Options will be deemed to have been issued without
consideration.
(g) Treasury Shares. The number of shares of Common Stock
outstanding at any given time does not include shares owned or held by
or for the account of the Company or any Subsidiary, and the
disposition of any shares so owned or held will be considered an
issuance or sale of Common Stock
(h) Record Date. If the Company takes a record of the holders
of Common Stock for the purpose of entitling them (i) to receive a
dividend or other distribution payable in Common Stock, Options or
Convertible Securities or (ii) to subscribe for or purchase Common
Stock, Options or Convertible Securities, then such record date will be
deemed to be the date of the issuance or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be.
2.3 Subdivision or Combination of Common Stock. If the Company at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of shares of Warrant
Stock obtainable upon the exercise or conversion of this Warrant will be
proportionately increased. If the Company at any time combines (by reverse stock
split or otherwise) one or more classes of its outstanding shares of Common
Stock into a smaller number of shares, the Exercise Price in effect immediately
prior to such combination will be proportionately increased and the number of
shares of Warrant Stock obtainable upon the exercise or conversion of this
Warrant will be proportionately decreased.
2.4 Reorganization, Reclassification, Consolidation, Merger or Sale.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets to another Person or
other transaction which is effected in such a way that holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as "Organic Change." Prior to the consummation of any Organic Change,
the Company will make appropriate provision (in form and substance satisfactory
to the Holder) to insure that the Holder will thereafter have the right to
acquire and receive in lieu of or addition to, as the case may be, the shares of
Warrant Stock immediately theretofore acquirable and receivable upon the
exercise or conversion of this Warrant, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for the number
of shares of Warrant Stock immediately theretofore acquirable and receivable
upon exercise or conversion of this Warrant had such Organic Change not taken
place. In any such case, the Company will make appropriate provision (in form
and substance satisfactory to the Holder) with respect to the Holder's rights
and interests to insure that the provisions of this Section 2 and Sections 3 and
4 will thereafter be applicable to this Warrant (including, in the case of any
such consolidation, merger or sale in which the successor entity or purchasing
entity is other than the Company, an immediate adjustment of the Exercise Price
to the value for the Common Stock reflected by the terms of such consolidation,
merger or sale, and a corresponding immediate adjustment in the number of shares
of Warrant Stock acquirable and receivable upon the exercise or conversion of
this Warrant, if the value so reflected is less than the Base Price in effect
immediately prior to such consolidation, merger or sale). The Company will not
effect any such consolidation, merger or sale unless prior to the consummation
thereof, the successor entity (if other than the Company) resulting from
consolidation or merger or the entity purchasing such assets assumes by written
instrument (in form and substance satisfactory to the Holder) the obligation to
deliver to the Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the Holder may be entitled to acquire.
2.5 Certain Events. If any event occurs of the type contemplated by the
provisions of this Section 2 but not expressly provided by such provisions
(including the granting of stock appreciation rights, phantom stock rights or
other rights with equity features), then the Company's board of directors will
make an appropriate adjustment in the Exercise Price and the number of shares of
Warrant Stock obtainable upon the exercise conversion of this Warrant so as to
protect the rights of the Holder; provided that no such adjustment will increase
the Exercise Price or decrease the number of shares of Warrant Stock obtainable
as otherwise determined pursuant to this Section 2.
2.6 Notices.
(a) Immediately upon any adjustment of the Exercise Price, the
Company will give written notice thereof to the Holder, setting forth
in reasonable detail and certifying the calculation of such adjustment.
(b) The Company will give written notice to the Holder at
least 20 days prior to the date on which the Company closes its books
or takes a record (i) with respect to any dividend or distribution,
including Liquidating Dividends as set forth in Section 3, upon the
Common Stock, (ii) with respect to any pro rata subscription offer to
holders of Common Stock, (iii) with respect to any Purchase Rights as
set forth in Section 4 or (iv) for determining rights to vote with
respect to any Organic Change, dissolution or liquidation.
Section 3. Liquidating Dividends. If the Company declares or pays a
dividend upon the Common Stock payable otherwise than in cash out of earnings or
earned surplus (determined in accordance with United States generally accepted
accounting principles, consistently applied) except for a stock dividend payable
in shares of Common Stock (a "Liquidating Dividend"), then the Company will
pay to the Holder at the time of payment thereof the Liquidating Dividend which
would have been paid to the Holder on the Warrant Stock had this Warrant been
fully exercised immediately prior to the date on which a record is taken for
such Liquidating Dividend or, if no record is taken, the date as of which the
record holders of Common Stock entitled to such dividends are to be determined.
Section 4. Purchase Rights. If at any time the Company grants, issues
or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock ("Purchase Rights"), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the
number of shares of Warrant Stock acquirable upon complete exercise of this
Warrant immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights or, if no such record is taken, the
date as of which the record holders of Common Stock are to be determined for the
grant, issuance or sale of such Purchase Rights.
Section 5. Definitions. The following terms have meanings set forth
below:
"Common Stock" means, collectively, the Company's Common Stock, par
value U.S. $0.0001 per share, and any capital stock of any class of the Company
hereafter authorized which is not limited to a fixed sum or percentage of par or
stated value in respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding up of the Company.
"Common Stock Deemed Outstanding" means, at any given time, the number
of shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock deemed to be outstanding pursuant to Sections 2.2(a) and
2.2(b), regardless of whether the Options or Convertible Securities are actually
exercisable at such time, but excluding any shares of Common Stock issuable upon
the exercise or conversion of this Warrant.
"Market Price" of any security means the average of the closing prices
of such security's sales on all securities exchanges on which such security may
at the time be listed or, if there has been no sales on any such exchange on any
day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted by The
Nasdaq Stock Market, Inc. as of 4:00 P.M., New York City time, or, if on any day
such security is not quoted by The Nasdaq Stock Market, Inc., the average of the
highest bid and lowest asked prices on such day in the domestic over-the-counter
market as reported by the National Quotation Bureau, Incorporated, or any
similar successor organization, in each such case averaged over a period of 21
days consisting of the day as of which "Market Price" is being determined and
the 20 consecutive business days prior to such day. If at any time such security
is not listed on any securities exchange or quoted by The Nasdaq Stock Market,
Inc. or the over-the-counter market, the "Market Price" will be the fair value
thereof determined jointly by the Company and the Holder. If the parties are
unable to reach agreement within a reasonable period of time, such fair value
will be determined by an appraiser jointly selected by the Company and the
Holder. The determination of such appraiser will be final and binding upon the
parties, and the fees and expenses of such appraiser will be borne by the
Company.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Subsidiary" means any corporation, partnership, limited liability
company, association, joint stock company, trust or other business entity of
which (a) a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors is at the time owned or controlled, directly or
indirectly, by the Company, one or more Subsidiaries of the Company or a
combination thereof or (b) a majority of the partnership, membership or other
similar ownership interest thereof is at the time owned or controlled, directly
or indirectly, by the Company, one or more Subsidiaries of the Company or a
combination thereof. For purposes of this Warrant, a Person will be deemed to
have a majority ownership interest in a partnership, limited liability company,
association, trust or other business entity if such Person is allocated a
majority of partnership, membership, association, trust or other business entity
gains or losses or controls the general partner, managing member, trustee or
other controlling Person of such partnership, limited liability company,
association, trust or other business entity.
"Warrant Stock" means shares of the Company's Common Stock; provided
that if there is a change such that the securities issuable upon the exercise or
conversion of this Warrant are issued by an entity other than the Company or
there is a change in the class of securities so issuable, then the term "Warrant
Stock" will mean one share of the securities issuable upon the exercise or
conversion of this Warrant if such securities is issuable in shares, or will
mean the smallest unit in which such securities is issuable if such securities
is not issuable in shares.
Section 6. No Voting Rights; Limitations of Liability. This Warrant
will not entitle the Holder to any voting rights or other rights as a
stockholder of the Company. No provision hereof, in the absence of affirmative
action by the Holder to purchase or acquire Warrant Stock, and no enumeration
herein of the rights or privileges of the Holder, will give rise to any
liability of the Holder for the Exercise Price of Warrant Stock acquirable by
exercise or conversion of this Warrant or as a stockholder of the Company.
Section 7. Warrant Transferable. Subject to the transfer conditions
referred to in the legend endorsed hereon, this Warrant and all rights hereunder
are transferable, in whole or in part, without charge to the Holder, upon
surrender of this Warrant with a properly executed Assignment in substantially
the form of Exhibit II at the principal office of the Company.
Section 8. Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for new Warrants of like tenor representing in
the aggregate the purchase rights hereunder, and each of such new Warrants will
represent such portion of such rights as is designated by the Holder at the time
of such surrender. The date the Company initially issues this Warrant will be
deemed to be the "Date of Issuance" hereof regardless of the number of times new
certificates representing the unexpired and unexercised rights formerly
represented by this Warrant are issued.
Section 9. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Holder will be satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing this Warrant, and in the case of any such loss, theft or destruction,
upon receipt of indemnity reasonably satisfactory to the Company (provided that
if the Holder is [Central Asian Industrial Holdings N.V.] or a financial
institution or other institutional investor its own agreement will be
satisfactory) or, in the case of any such mutilation upon surrender of such
certificate, the Company will (at its expense) execute and deliver in lieu of
such certificate a new certificate of like kind representing the same rights
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate.
Section 10. Notices. All notices referred to in this Warrant will be in
writing and will be deemed to have been given when delivered in the manner and
to the addresses provided in Section 9.02 of the Master Agreement.
Section 11. Amendment and Waiver. Except as otherwise provided herein,
the provisions of this Warrant may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Holder.
Section 12. Descriptive Headings. The descriptive headings of the
several Sections of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
Section 13. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS WARRANT WILL BE GOVERNED BY THE INTERNAL
LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE.
Section 14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY
IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT. EACH OF THE PARTIES
AGREES THAT ALL MATTERS OF LAW AND FACT IN CONNECTION WITH ANY SUCH ACTION OR
PROCEEDING WILL BE HEARD AND DECIDED SOLELY BY THE COURT BEFORE WHICH SUCH
ACTION OR PROCEEDING IS BROUGHT IN ACCORDANCE WITH SECTION 15.
Section 15. Submission to Jurisdiction. The Company and the Holder each
hereby submit to the exclusive jurisdiction of any state or federal court
sitting in Wilmington, Delaware, in any action or proceeding arising out of or
relating to this Warrant, agree that all claims in respect of the action or
proceeding may be heard and determined in any such court, and agree not to bring
any action or proceeding arising out of or relating to this Warrant in any other
court. The Company and the Holder each hereby waive any defense of inconvenient
forum to be maintenance of any action or proceeding so brought and waive any
bond, surety or other security that might be required of any other party with
respect thereto. The Company and the Holder each agree that a final judgment in
any action or proceeding so brought will be conclusive and may be enforced by
suit on the judgment or in any other manner provided by law.
* * * * *
IN WITNESS WHEREOF, the Company has executed and delivered
this Warrant on May 10, 2002.
CHAPARRAL RESOURCES, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------
Its: Co-Chairman
EXHIBIT I
FORM OF EXERCISE NOTICE
[To be executed only upon exercise of Warrant]
To CHAPARRAL RESOURCES, INC.:
The undersigned registered holder of the attached Warrant hereby
irrevocably exercises such Warrant for, and purchases thereunder, __________
shares of the Warrant Stock and herewith makes payment of $__________ therefor,
and requests that the certificates for such shares be issued in the name of, and
delivered to _____________________, whose address is___________________________.
Dated:
---------------------------
---------------------------
(Street Address)
---------------------------
(City) (State) (Zip Code)
The Company hereby acknowledges this Notice and hereby directs
[TRANSFER AGENT] to issue the above indicated number of _______ shares of
Warrant Stock, in accordance with the Transfer Agent Instructions dated
_____________________, 2002 from the Company and acknowledged and agreed to by
[TRANSFER AGENT].
CHAPARRAL RESOURCES, INC.
By:
---------------------------------
Name:
Title:
EXHIBIT II
FORM OF ASSIGNMENT
To CHAPARRAL RESOURCES, INC.:
FOR VALUE RECEIVED, the undersigned registered holder of the attached
Warrant hereby sells, assigns and transfers unto _________________ the rights
represented by such Warrant to purchase __________ shares of the Warrant Stock
of CHAPARRAL RESOURCES, INC. to which and such Warrant relates, and appoints
______________ Attorney to make such transfer on the books of CHAPARRAL
RESOURCES, INC. maintained for such purpose, with full power of substitution in
the premises.
Dated:
-------------------------------
-------------------------------
(Street Address)
-------------------------------
(City) (State) (Zip Code)
EXHIBIT III
FORM OF CONVERSION NOTICE
[To be executed only upon conversion of Warrant]
To CHAPARRAL RESOURCES, INC.:
The undersigned registered holder of the attached Warrant hereby
irrevocably converts such Warrant with respect to _________ shares of the Common
Stock which such holder would be entitled to receive upon the exercise thereof,
and requests that the certificates for such shares be issued in the name of, and
delivered to _________________, whose address is ______________________________.
Dated:
----------------------------
----------------------------
(Street Address)
----------------------------
(City) (State) (Zip Code)
The Company hereby acknowledges this Notice and hereby directs
[TRANSFER AGENT] to issue the above indicated number of _______ shares of
Warrant Stock, in accordance with the Transfer Agent Instructions dated
_____________________, 2002 from the Company and acknowledged and agreed to by
[TRANSFER AGENT].
CHAPARRAL RESOURCES, INC.
By:
---------------------------------
Name:
Title:
